Crypto weekly update
1. December 2022  • clock 5 min •  Daniel Mitrovsky

Retail Investors Are Accumulating Bitcoin – Cryptocurrency Market Overview (18.11 – 1.12.)

Over the past two weeks, the total market capitalisation exceeded €823 billion. The increase in market capitalisation over a 14-day period is 2.36%. The price of Bitcoin has risen by 1,86 % over the last 14 days to a current value of over €16,400. Bitcoin’s dominance is currently around 38,3 %.

Source: Coinmarketcap

Retail Investors Are Accumulating Bitcoin

Even though the fall of FTX and other companies brought a huge dose of uncertainty to the market, it seems that many investors took advantage of the situation to accumulate additional assets.

According to analytics platform Glassnode, a huge number of smaller retail investors started accumulating BTC after the FTX crash, even though the sentiment in the market was very negative, as the FTX crash can be classified as one of the biggest disasters in the history of cryptocurrencies.

According to on-chain data from Glassnode, there are currently two basic types of retail BTC investors accumulating bitcoin in the market.

The first type of investors, referred to as “shrimps,” defines entities or investors who own less than 1 bitcoin. The second type are the so-called “crabs” – these are investors who have up to 10 BTC in their wallets.

The first type of investors, who own less than one bitcoin, reportedly added a total of 96,200 BTC to their portfolios after the FTX crash. This group of investors now collectively own up to 1.21 million BTC, equivalent to 6.3% of the current circulating supply of 19.2 million BTCs.

On the other hand, investors called “crabs” have bought a total of 191,600 BTC in the last 30 days. According to the data, the current accumulation broke the previous high of BTC accumulation recorded by this group of investors back in July 2022, when they collectively accumulated 126,000 bitcoins in 30 days.

The behaviour of this group of investors is very interesting, according to leading experts from the world of cryptocurrencies, especially since the FTX crash has become the subject of widespread speculation involving alleged fraud and misappropriation of funds. However, investors seem to remain optimistic in the long run despite this disaster. Source

After FTX, BlockFi Also Declared Bankruptcy

Lending company BlockFi, which was one of the leading crypto lenders during the last bull market, filed for Chapter 11 bankruptcy this Monday.

The company’s bankruptcy comes after BlockFi froze all customer withdrawals in the wake of the FTX collapse. The company admitted in mid-November that it had significant exposure to the FTX cryptocurrency exchange and its partners.

BlockFi said in a statement that the liquidity crisis was due to its exposure to FTX through loans made to Alameda Research, an FTX-affiliated trading company, as well as because of cryptocurrencies the company held on the FTX platform. Those assets remained frozen after FTX’s collapse, causing the company to become illiquid and have to declare bankruptcy.

BlockFi is far from the first lending company to declare bankruptcy this crypto winter. Two of its former biggest competitors, Celsius Network and Voyager Digital, declared bankruptcy in July, citing extreme market conditions that led to massive losses for both companies. Source

Bitcoin Mining Revenue Lowest in Two Years

Bitcoin miners’ revenues have fallen to a two-year low due to falling asset prices in the cryptocurrency market, as well as the higher computing power required on the network.

Total daily bitcoin mining revenue consisting of block rewards and transaction fees fell to $11.67 million at the end of November, a number last seen on 2 November 2020, when Bitcoin’s trading price was around $13,500.

Even though Bitcoin is currently trading at $16,800, which is $3,300 more than it was in November 2020, factors including greater mining difficulty and rising energy prices contribute to lower income in dollar terms.

On the other hand, the amount of computing power required to mine a single block (the difficulty parameter) has skyrocketed to an all-time high of nearly 37 trillion (the units determining mining difficulty), forcing bitcoin miners to spend more energy and computing power to remain competitive.

Over the past three months, however, the hash rate of the bitcoin network has steadily declined. The hash rate is 225.9 exahash per second (EH/s), down 28.6% since the end of October 2022, when the hashrate was as high as 316 EH/s.

Mining revenue is an important indicator as miners use their mining equipment to process transactions on the network and maintain its security. Too low revenues may cause miners to be unable to cover their mining costs, which may lead to the divestment of some of the mining equipment and a decrease in the overall hashrate. Source

Chainlink Staking Coming Soon

Chainlink fans will soon be able to stake their LINK tokens directly on the Chainlink platform.

The staking feature, which will launch as version 0.1 in beta mode as early as 6 December, comes as part of the so-called “Chainlink Economics 2.0”, which aims to increase opportunities for LINK token holders to earn rewards for helping to increase the crypto-economic security of Oracle services.

Until now, Chainlink users have had to start their own nodes in order to earn rewards in LINK tokens. The stacking feature effectively opens up new avenues for them to earn rewards directly in LINK tokens, which could theoretically increase the demand for the token.

In addition, according to crypto analysts, the demand for Chainlink as an Oracle service provider could increase. David Gokhshtein, the founder of blockchain-focused media company Gokhshtein Media, believes this could happen in the wake of the recent FTX collapse. Gokhshtein pointed out that traders are pushing for reserve transparency from exchanges following the FTX collapse, which may increase demand for Oracle services such as Chainlink and increase demand for the LINK token. Source

Cardano Wants to Launch Its Own Algorithmic Stablecoin

Blockchain platform Cardano has teamed up with a Layer-one project called COTI. The goal of this collaboration is to create an over-collateralised algorithmic stablecoin, which would be backed by reserves in the form of cryptocurrencies stored in dedicated backing reserves.

The algorithmic stablecoin will reportedly be integrated into selected platforms and decentralized exchanges (DEXes), which will reward users for providing liquidity using an algorithmic stablecoin called Djed.

Following a successful audit and a series of rigorous stress tests, the $DJED stablecoin is expected to be launched on the mainnet in January 2023. According to the developers, this stablecoin will be pegged to the US dollar and will be backed by the Cardano cryptocurrency (ADA). A reserve coin, with ticker $SHEN, will be used to back the stablecoin.

Commenting on the creation of the $DJED stablecoin, Shahaf Bar-Geffen, CEO of COTI, said that it was recent market events that proved the need to find a safe haven from volatility and that $DJED will serve as that safe haven in the Cardano network. Source

South Korean University to Introduce Blockchain Identification Cards

Jeonnam State University in South Korea has introduced student ID cards based on mobile phones using blockchain technology.

The university said its ID cards will use decentralized identity technology (DID). This is the same kind of IT solution currently used by the national police agency in Korea to issue digital driver’s licenses.

The university management further said that the mobile IDs will help protect the personal information of its students and also help the university provide convenient academic administration services. In this case, blockchain technology should help in the prevention of ID card forgery as well as the falsification of personal information, which should help prevent data leakage and increase overall efficiency. Source

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Daniel Mitrovsky


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